mRNA processing plays an important role in the regulated expression of eukaryotic genes. Processing occurs contranscriptionally as nascent chains are being synthesized by nuclear RNA polymerase II. The earliest modification event is the formation of the m7GpppN cap. Our goal is to understand the mechanism of capping and the role f the cap in cellular mRNA metabolism through biochemical and genetic analysis of enzymes that catalyze cap formation. This proposal focuses on the first two enzymes in the cap synthetic pathway: RNA triphosphatase and RNA guanlyltransferase. Yeast and mammals use different strategies to assemble a bifunctional enzyme with triphosphatase and guaylyltransferase activities. In yeast, separate triphosphatase (Cet1p) and guaylyltransferase (Ceg1p) enzymes interact to form a heterodimer, whereas in mammals, autonomous triphosphatase and guaylyltransferase domains are link in cis within a single polypeptide (Mce1p). The guanylytransferases are conserved between fungi and mammals, but the triphosphatase components diverge with respect to structure and mechanism. We propose in aim 1 to define the active sites of the mouse and yeast triphosphatases by targeted mutagenesis and to crystallize the enzymes for structure determination by X-ray diffraction. In aim 2, we will explore how the capping apparatus is targeted in vivo to achieve specific capping of RNA polymerase II transcripts. Our working model is that capping is directed to nascent pre-mRNAs though the binding of the guanylyltransferase component to the phosphorylated CTD of elongating RNA polymerase II. We will define the CTD-guanylyltransferase interface and test the hypothesis that the triphosphatase is brought to the transcription complex via its physical connection to the guanylyltranserase. In aim 3, we propose to define the features of yeast triphosphatase and guanylyltranserfase that mediate heterodimerization. In aim 4, we will exploit a collection of temperature-sensitive cet1 mutants to determine how inactivation of RNA triphosphatase affects gene expression. The studies of the yeast and mammalian capping enzymes proposed herein will provide new insights into phosphoryl transfer reaction mechanisms, contribute to an emerging picture of the pol II CTD as a landing pad for macromolecular assemblies that regulate mRNA synthesis and processing, and help clarify the role of 5' end structure in mRNA decay.